In order to bring relief to the consumers and reduce the edible oil prices, Center has reduced the duty on Crude Palm Oil (CPO) by 5%.
Further, to cool down the prices of RBD Palmolein (Refined Palm oil), Department of Food & Public Distribution has recommended removal of the restriction on import of RBD Palmolein and to put it in the open general category of imports.
These Moves are expected to lower prices of edible oils for the domestic consumers.
The major edible oils consumed in the country are mustard, soyabean, groundnut, sunflower sesame oil, niger seed, safflower seed, castor and linseed (primary source) and coconut, palm oil, cottonseed, rice bran, solvent extracted oil, tree & forest origin oil. The total domestic demand of edible oils in the country is approximately 250 LMT per year. Around 60% of the edible oils consumed in the country is met through imports. Palm oils (Crude + Refined) import constitutes around 60% of the total edible oil imported, out of which 54% is imported from Indonesia and Malaysia. As the country has to depend heavily on imports to meet the gap between demand and supply, the International prices have an impact on domestic prices of edible oils.
Food inflation including high prices of edible oils has been a cause of concern and therefore the government has been monitoring their prices and taking steps by way of removing bottlenecks to soften prices. A mechanism was institutionalized involving nodal offices of the Customs department, FSSAI, Plant Quarantine division to monitor the speedy clearance of food commodities like pulses and Crude Palm Oil (CPO) at shipping ports. The international prices of crude edible oil and refined palm oil were showing declining trend in prices over the past one month. Still, the prices of domestic refined palm oil and crude edible oil remained high.
The Government, keeping in view the consumer interest due to rising prices of Edible oil, has reduced the duty on CPO duty by 5%. Further, to cool down the prices of RBD Palmolein (refined Palm oil), DFPD recommended removal of the restriction on import of RBD Palmolein and put it in the open general category of imports to support its availability at lower prices for the domestic consumer.
Ministry of Finance vide Notification No. 34/2021-Customs dated June 29, 2021 has cut duty on CPO to 10% from 15% w.e.f. June 30, 2021 and this will remain in force upto and inclusive of the September 30, 2021. The reduction will bring down the effective tax rate on CPO to 30.25% from the earlier 35.75% inclusive of additional agri-cess of 17.5% and 10% social welfare cess. This reduction, in turn, will bring down the retail prices of Edible Oils.
Further, Department of Commerce vide Notification No. 10/2015-2020 dated June 30, 2021 has issued revised import policy for Refined Bleached Deodorized (RBD) Palm Oil and RBD Palmolein by removing both from restricted to free category. This would be effective with immediate effect and for a period upto December 31, 2021.
Government has reduced duty only till September 2021 to clearly signal to farmers that their interest shall not be compromised. Making India “AtmaNirbhar” in edible oils is our cherished goal and National Oilseeds mission is committed to achieving it by aligning policies including foreign trade.The government will be monitoring the prices on a daily basis expects the industry to pass on full benefits to the consumers.
The Press Release can be accessed at: https://www.pib.gov.in/PressReleasePage.aspx?PRID=1731715